Paris Working for Quadripartite Summit in Damascus to Discuss Lebanon, Naharnet

Paris is trying to sponsor a quadripartite summit in Damascus grouping leaders of France, Syria, Turkey and Qatar to discuss the Lebanon situation and the Middle East peace process, the daily Asharq al-Awsat reported Sunday.
It said Paris wants the summit held during President Nicolas Sarkozy's forthcoming visit to Damascus for talks with his Syrian counterpart Bashar Assad.

The proposed summit also is to include Turkish Premier Recep Tayyip Erdogan and the Emir of Qatar Sheik Hamad Bin Khalifa al-Thani, according to the Paris-datelined report.

The proposed summit would consider the Lebanon situation, the Syrian-Israeli talks through Turkey, the Palestinian-Israeli talks and regional topics, the report added.

It quoted informed French sources as saying Sarkozy would not be accompanied by an expanded economic and business delegation during his visit to Syria because "the two states are still in the stage of setting up political relations."  

Making peace with Syria
BY Alain Gresch
September 1, 2008, IHT

President Nicolas Sarkozy's visit to Damascus this month confirms the failure of his policy of isolating the regime of President Bashar al-Assad.

That policy began at the end of 2004, when Presidents George W. Bush and Jacques Chirac formed a common front, following the UN Security Council's Resolution 1559 of Sept. 2 of that year, which called for the withdrawal of Syrian troops from Lebanon and the disarmament of all militias – meaning mainly Hezbollah. Some months later, after the assassination of the Lebanese prime minister, Rafik Hariri, on Feb. 14, 2005, the Syrians were forced to withdraw from Lebanon and the UN set up an international commission of inquiry. The future of the Syrian regime looked increasingly uncertain. Bush and Chirac decided to crack down harder, boycotting it politically and punishing it economically. For the Bush administration, Syria was a part of the "axis of evil."

Three years – and a war – later, their policy has collapsed. This is partly because of Lebanon and partly because of their misreading of Syria's policy. In Lebanon, the clash was never between the "good guys" and "bad guys," it was between two alliances representing roughly half of the population. Hezbollah was allied with General Michel Aoun, the main leader of the Christian Maronites – something which didn't fit into Bush's vision. Any political solution means compromise and will have to take into account this balance of power; otherwise things will have to be resolved with guns (and the strongest, Hezbollah, will win).

So what was Syria's policy? To avoid taking military control of Lebanon again in the way it had done in the 1990s or in the beginning of this decade; to prevent Lebanon from being transformed into an opposition front against the Syrian regime (as some of the pro-Western Lebanese coalition wanted); and to keep the Lebanon question open (including the arming of Hezbollah) as a bargaining chip with Israel.

When these aims were realized with the Doha agreements between the Lebanese majority and the opposition, Damascus endorsed them without reservation.

Assad told me this summer that he wants to make peace with Israel. He is afraid for the future of the region, which is growing more socially conservative and sliding toward terrorism. To stop the country from becoming a fertile ground for terror, he said, you need development, culture, an educational system and dialogue. And you absolutely need peace. This is a fundamental difference from Iranian policy.

In May, Israel and Syria announced the opening of indirect negotiations, with the Turkish prime minister, Recep Tayyip Erdogan, as intermediary.

"After eight years of paralysis," Assad said, referring to the end of negotiations between the two countries in 2000, "after the war on Lebanon, after two attacks on Syria, there is no trust. We are probing Israel's intentions, we don't trust them and perhaps they don't trust us."

"We want to make sure that the Israelis are ready for peace." he said. "Ready to return the whole Golan."….

Syria economy: Outlook – Reducing subsidies and reforming taxation
29 Aug 2008
COUNTRY BRIEFING FROM THE ECONOMIST INTELLIGENCE UNIT

Syria has been gradually reforming its centrally planned economy, a process that has been led by the deputy prime minister for economic affairs, Abdullah al-Dardari. The rise in global commodity prices, at a time of declining oil production, has highlighted the weakness of the Syrian economic system and enabled fiscally prudent reformers finally to make some progress on issues such as subsidies and taxation. Fuel subsidies were reduced in May, but higher oil prices and a 25% rise in public-sector salaries have largely offset the fiscal benefits, leaving open the debate on reform of the public finances.

Although the introduction of a value-added tax (VAT) has been approved in principle, its implementation, which has already been delayed, appears unlikely until well into 2009. The policy debate in 2009 will increasingly focus on the need to diversify the economy away from oil and to encourage investment—including through the opening of the Damascus Stock Exchange.

The Economist Intelligence Unit expects Syria's fiscal deficit in 2008 to remain substantial, at around 5.1% of GDP, down from an estimated 7% in 2007. The ongoing deficit is attributable to increases in public-sector salaries and higher government purchase prices for crops, offset by a substantial reduction in fuel subsidies and by grants that Syria is receiving from some Gulf states in reward for supporting the Doha agreement.

One factor helping to reduce the deficit in 2008 will be earnings from the telecommunications sector, as the government's share of mobile-phone revenue increases to 50% and as third-generation (3G) services are introduced In 2009 fuel subsidies will remain a fiscal burden, as Syrian crude production—especially of lighter-grade and more lucrative oil—continues to decline, averaging 374,000 barrels/day (b/d) over 2008-09. However, an increase in the non-oil tax take, which will be boosted by the introduction of a 10% VAT rate, will result in a slight narrowing of the deficit to 4.4% of GDP. Revenue could be boosted further if the government licenses a third mobile-phone operator.

The likely fiscal impact of the government's public-sector reform plans, which include the transformation of state-owned enterprises into autonomous companies with their own budgets, is mixed. Although state revenue would fall, these firms would be required to pay corporation tax and would no longer receive state subsidies, probably resulting in a net positive impact.

The governor of the Central Bank of Syria, Adib al-Mayaleh, is leading efforts to introduce monetary reform. Since late 2007 the Syrian pound has been pegged to a basket of currencies based on the IMF's special drawing rights (SDR). The Central Bank has begun to issue Treasury bills on a trial basis, and these instruments are expected to be used to finance development projects and ultimately the fiscal deficit. Mr Mayaleh has additional plans to launch a local bond market, increasing the number and sophistication of monetary tools available to the Central Bank and helping to contain the inflationary impact of budget deficits.

Moreover, since the beginning of 2008 the Central Bank has been actively reducing the restrictions on foreign-currency transactions. Although designed specifically to facilitate investment, the measures should also help to develop and modernise the banking sector.

Photo: Quirinius, Governor of Syria enrolling Mary and Joseph for taxation. Bigger version here of the Byzantine mosaic c. 1315. This was the first census that took place while Quirinius was governor of Syria. –Luke 2:2 Josephus regarded Augustus' insistance on taking a census for the purposes of taxation and conscription as the beginning of a Zealot movement that encouraged armed resistance to the Roman empire, culminating eventually in the First Jewish-Roman War.

Damascus emerges from isolation (30 August 2008)
Middle East Economic Digest, James Gavin

After being abandoned by its Arab allies and economically isolated by US sanctions, President Bashar al-Assad's regime has made a remarkable comeback in recent months…. "On one side, Israel is seeing what it can do to isolate Iran, and to find out to what extent Syria will move against Hezbollah," says Joshua Landis, …

Hezbollah warlord was an enigma:
By Borzou Daragahi, Los Angeles Times
August 31, 2008

Imad Mughniyah, alleged mastermind of infamous terrorist attacks, was one of the most hunted men in the world. His death is as mysterious as his life………

Turkish PM Erdogan to visit Syria: Erdogan said in Ankara that the fourth round of indirect talks between Syria and Israel was finished and the fifth round of talks was underway.

Russia threatens to supply Iran with top new missile system as 'cold war' escalates, Telegraph,

Russia is deploying the threat to sell a "game changing" air defence system to Iran as a high stakes bargaining chip in its new "cold war" with America, The Sunday Telegraph has learned.  

Russia Claims It Has Sphere of Influence in the World

Kouchner worries about lingering hatred among feuding Lebanese parties
By The Daily Star          
Wednesday, August 27, 2008

The French Foreign Minister was satisfied with the outcomes with his visit to Lebanon and Syria, but had expressed concern about "hidden tensions among Lebanese groups. You Lebanese need minimum of three decades to erase all the hatred that built up between feuding groups through the years," As-Safir newspaper quoted Kouchner as saying. …

Moussa said the league has led mediation efforts between Lebanon and Syria for over a year. "Our role in Lebanon is well known, and we have worked with Syria, which applied at last what many were demanding."…

EADS denies Airbus in plane talks with Syria. "We are not currently discussing any deal on Airbus planes with the Syrian airline or authorities," an EADS spokesman said.

Iraq Signs Oil Deal With China Worth Up to $3 Billion: The first major oil deal Iraq has made with a foreign country since 2003. The United States Embassy in Baghdad had no immediate comment on the oil deal.

Georgia says cutting diplomatic ties with Russia

Italy to Spend $5 Billion to End Colonial Dispute With Libya
By Steve Scherer

Aug. 30 (Bloomberg) — Italian Prime Minister Silvio Berlusconi pledged $5 billion over 25 years to Libyan leader Muammar Qaddafi in compensation for the occupation of the country in the 30 years before World War II. 

Italy will pay $200 million per year to Libya in the form of investments in infrastructure. The money will finance the construction of a coastline highway that runs about 1,600 kilometers (994 miles) between the Egyptian and Tunisian borders. "It's a full moral recognition of the damage done to Libya during Italy's colonial period,'' Berlusconi said after arriving at the airport in the Libyan city of Benghazi, where the two leaders met to sign the accord. "This will end 40 years of misunderstandings.''

Syria arrests two Kurdish leaders: 

Talal Mohammad of the banned Wifaq party, an offshoot of the Kurdish Workers Party (PKK), which is also active in Turkey and Iraq, was arrested without warrant in northeastern Syria last week and not heard from since, according to the National Organisation of Human Rights in Syria. 

Authorities earlier arrested Mashaal Tammo, an official in Future Movement, which like all opposition parties in Syria is banned. Future Movement advocates democracy and equal rights for Syria's one million Kurdish minority.

Syrians writers and intellectuals are pleading with Syrian authorities to arrest them rather than kidnap them
By: Ibrahim Yousef, 8/25/08

The Courts and Mr. Arar: Editorial, New York Times
Published: August 31, 2008

We were deeply disheartened in June when a federal appeals court panel dismissed, on flimsy legal grounds, the civil rights lawsuit brought by Maher Arar. Mr. Arar, a Syrian-born Canadian, was a victim of the Bush administration’s notorious policy of “extraordinary rendition” — the outsourcing of interrogations to governments known to use torture.

Fortunately, the dismal 2-to-1 ruling will not be the final word. This month, the United States Court of Appeals for the Second Circuit, in Manhattan, took the rare step of scheduling a rehearing of Mr. Arar’s case before all 12 of the court’s active members. Even more unusual, it acted before a formal appeal was filed.

The court offered no explanation. But it is clear that some members are troubled by the panel’s brush-off of Mr. Arar’s claims — and the idea of again placing the Bush administration’s abuses beyond the reach of American law. ….

Canada, which first raised erroneous suspicions about Mr. Arar, has done the honorable thing. It apologized to him and agreed to pay him $10 million for its role in his nightmare. Mr. Arar deserves justice from this country. A strong decision allowing his case to proceed would strike an important blow for the rule of law and accountability.  (related article: Justice Dept. Investigating Deportation to Syria, June 6, 2008)